India has been a desired destination for outsourcing products and services to North America for decades. As the powerhouse of the almighty gig-economy, many multinational companies and foreigners have invested their business operations in India to get, in essence, better gigs. The country nurtures a massive number of graduates with advanced skills in software development, telecommunications, finance, information technology, and much more. With a highly skilled workforce deliberately focused on quality and performance, the service sector is the fastest growing in the world and has increased by 15 per cent this year, racking in a stellar $77,562.89 billion for providing services.
What’s, even more, is that India exports nearly twice that amount in physical goods with an incredibly successful manufacturing and agricultural sector, and also harbors the fastest growing consumer market in the world. Agricultural exports account for over 10 per cent of the world’s fruit and vegetable production. Exports increased this year by nearly 18 per cent in comparison to last year reaching an all-time high of $27.7 billion AUD in revenue. The retail industry, worth over $600 billion, is the best known to mankind with sky-rocketing market potential and low economic risks.
This has contributed to India’s massive presence in the global economy of trade, making the nation a valuable supplier for various industries in not only North America but the entire world. If you’re a foreign investor or a business trying to figure out how to find the best Indian supplier for your company, keep reading to learn more about some crucial tips to take into account.
Determine what kind of supplier
It’s no surprise that sourcing your suppliers internationally will save you money. Although, it varies depending on what you need to be supplied. For example, there are wholesalers, distributors, and then there are manufacturers and suppliers. If you’re interested in getting raw materials exported, you’ll need to find a relatively cheap wholesaler. If you’re trying to get a product made and sent to you (like plastic bottles per say), you will need to find a manufacturer or a distributor.
Two key factors to look out for when doing your research are the quality of the product and the quality of service. Many Indian suppliers have very high turnover rates. This is due to, in part, the tedium and bore of the work. In fact, there are labour laws in place for the purpose of supporting these situations; should a supplier bail on you, they’re legally protected by government policies. That’s why it’s important to read supplier reviews to determine who is well-trusted, such that you don’t waste your time investing in a supplier that turns out to be a flop.
Once you’ve started negotiating with a supplier, don’t ask too many questions. They might not respond, as they feel your request is too much work. It’s also important to paint the illusion that you’re a successful and established enterprise who’s willing to pay them good money for their products— which is an important factor with large manufacturers and suppliers in India. Small-time suppliers won’t be as picky with who they take up as a customer, although it’s still important to maintain a professional front when dealing with Indian companies. Business etiquette goes a long way.
Ask for a sample
When ordering materials or a manufactured product from India, it’s vitally important that you ask the supplier for a sample first. This enables you to see if you like the quality and service of the supplier. If you’re not completely satisfied, don’t be afraid to turn down the product and look for a different supplier— there are tons of suppliers out there, so chances are you found one of the less co-operative ones.
Online supplier marketplaces
If you’re still overwhelmed after researching and reading reviews, there are numerous B2B websites that can point you in the right direction by exhibiting various suppliers. Some useful website includes:
The websites above are essentially the Alibaba’s of India. However, be cautious of websites that you find on your own in this respect, since not all supplier websites can be trusted. So beware of scams! The last thing you want is to send money to India, only to never receive your goods.
The third party middleman
There’s something in India called Expert Promotion Councils, which are people who essentially act as the third party link between Indian suppliers and foreign buyers. There are industry-specific middlemen that exist for a variety of things, so don’t be afraid to use them should you be concerned about the shipping and speed of your supplier. These services can also act as a guide to help you find the perfect supplier according to your own criteria.
Small Suppliers vs. Large Suppliers
Determining whether you want to go with a small or large supplier is entirely up to you, but you should consider a couple of things first. If you’re only ordering a small quantity, larger suppliers might not get back to you as they see your business as a waste of time. Most have a minimum order amount set in place, and larger suppliers are definitely more reliable than small independent ones. However, if you find a small supplier to negotiate with, they could be more lenient with pricing and also can adapt to your needs more accordingly since they’re more focused on you. If you do choose to go with a smaller supplier, be sure to do your research beforehand to ensure they’re trustworthy with positive reviews.
Potential challenges when working with Indian suppliers
Labour Complications: Something that most people overlook about doing business with India is the fact that they have more holidays than any other country in the world. This may interfere with your order and the operational timeline you have put into play for your business. As mentioned above, new labor laws have been implemented this year which protect Indian employees by ensuring that large companies can’t fire them even if they’re not doing their job right. This allows them to perform their duties impartially while being legislatively protected by the government.
Power Insufficiency: Power in India is not accessible everywhere. This calls for a lack of efficiency in production and may delay your order.
Transportation Inefficiency: Transit in India is very slow and very expensive. It may take weeks for your order to come through, and a definite arrival time is not guaranteed. If timeliness is a crucial factor for you, sourcing supplies from India may not be your best option.
Sending money to India: Making international money transfers to India can be tricky if you decide to run a wire transfer. This is because India’s banking system is extremely advanced with respect to technology, and most businesses don’t use wire transfers to make international payments anymore. Along with wire transfers comes various fees and charges that most Indian companies don’t tolerate. This is a significant factor to take into consideration seeing that most people in North America use wire transfers to make cross-border payments. Investing in a platform that is more secure, reliable and efficient is your best option when paying your Indian supplier– or sending money to India in general. A great platform to use is REMITR, as this company makes international payments to India in no longer than one business day, and have numerous partnerships with Indian banks all across the country. This platform also doesn’t subject your business payments to obscure fees that most banks do, and your recipient won’t have to worry about additional charges for an incoming transfer.